How To A Tax Treaty: by Sushil Lakhani

How to read A Tax Treaty
By CA Sushil Lakhani
ICAI - Live Webcast By the Committee on International Taxation o ICAI on Friday 13th September, 2013 at 6.00 pm to 7.30 pm
A!enda"
Following DTAA o! "ndia#
#nited
$in!dom%#$&
'etherland Sin!a(ore )auritius #A*

,-./0.1/,How To +ead A Tax Treaty - By CA Sushil Lakhani
'ote"
For $on%enien$e o! &nder tanding o! the Arti$le , "ndia ha been treated a the o&r$e $o&ntry in the !ollowing lide . The treatie wo&ld e'&ally apply i! the other $o&ntry wo&ld ha%e been the o&r$e $o&ntry.
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How To +ead A Tax Treaty - By CA Sushil Lakhani
2TAA with #nited $in!dom %#$&
+elevant 2ates"
Signed Date Date
Treaty with 4nited 5ingdom
on ) *an&ary 2+th, 1,,3
o! noti!i$ation in the o!!i$ial ga-ette# Febr&ary 11, 1,,( o! $oming into !or$e April 1, 1,,( i.e. A.. . 1,,+/,6 igned on *an&ary 2+th, 1,,3 123ld 4rotocol5& igned on 3$tober 30th, 2012 $oming into !or$e !rom April 1, 2013 i.e. A.. . 201(/1+ 12'ew 4rotocol5&
0roto$ol 0roto$ol
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Article ," Sco(e o the Treaty

The
6on%ention hall apply to per on who are re ident o! India and7or #nited $in!dom %#$& i de!ined in Arti$le 31181b8 to mean ) 6the +e(ublic o India5 i de!ined in Arti$le 31181a8 to mean ) 67reat Britain and 'orthern Ireland5
"ndia
49
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Article , %contd8&" Territorial *xtension o India. #$
Thi 6on%ention e:tend to the territory o! India.#$, in$l&ding it territorial ea, and to tho e area o! the e:$l& i%e e$onomi$ -one or the $ontinental hel! ad;a$ent to the o&ter limit o! the territorial ea o! "ndia whi$h it ha , in a$$ordan$e with international law, o%ereign right !or the p&rpo e o! e:ploration and e:ploitation o! the nat&ral re o&r$e o! &$h area , and re!eren$e in thi 6on%ention to "ndia hall be $on tr&ed a$$ordingly. The territory o! "ndia ha not been e:tended to in$l&de the air pa$e abo%e it<< 1$ontra t with DTAA with other $o&ntrie eg. Singapore, =etherland et$8
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Article 1" Taxes Covered

"n "ndia, in$ome ta: in$l&de &r$harge thereon "n 49, $orporation and petrole&m ta: are al o $o%ered &nder the 6on%ention. 6ompare the ame with "ndia/=orway, "ndia/>&ngary or "ndia/ ?ermany ta: treatie . In 'orway" 'ine ty(es o taxes are $o%ered@ A.g. B&ni$ipal ta: on in$ome, =ational $ontrib&tion to Ta: A'&ali ation F&nd, SeamenC ta:, et$. In Hun!ary" Seven ty(es o taxes are $o%ered@ A.g. in$ome/ ta: on ho& ehold and a&:iliary !arm , Town and $omm&nity $ontrib&tion , le%y on di%idend and pro!it di trib&tion o! $ommer$ial $ompanie , et$. In 7ermany" Trade Ta: i $o%ered
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Article -" 7eneral 2e initions
2Tax5 excludes amo&nt paid in relation to any de!a&lt, omi ion or penalty in relation to the ta:e . 69iscal year5 de!ined !or "ndia to mean a 2pre%io& yearE a per "n$ome Ta: A$t F !or 49 to mean a a year beginning with April 6 in one year and ending with April + in the !ollowing year.
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Article -" 7eneral 2e initions
4rior to amendment the de inition read as under"
The term 6(erson5 in$l&de an indi%id&al, a $ompany and any other entity whi$h i treated a a ta:able &nit &nder the ta:ation law in !or$e in the re pe$ti%e 6ontra$ting State , b&t, &b;e$t to paragraph 2 o! thi Arti$le, does not include a (artnershi(:
4ara 1 o! the Arti$le tate that a 2partner hip whi$h i treated a a ta:able &nit &nder the "n$ome/ ta: A$t, 1,61 o!G"ndiaG hall be treated a a per on !or the p&rpo e o! thi 6on%ention.E (Refer Linklaters LLP vs. ITP (40 SOT 51) (TMum))
A ter the amendment vide the 'ew 4rotocol; the de inition o (erson has been amended to read as under"
The term <(erson< in$l&de an indi%id&al, a $ompany, a body o! per on and any other entity whi$h i treated a a ta:able &nit &nder the ta:ation law in !or$e in the re pe$ti%e 6ontra$ting State @
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Article =" 9iscal domicile%resident&
4rior to the amendment the 4ara , o the Article read as under" 2He ident o! a 6ontra$ting StateE mean any per on who, &nder the law o! that State, i liable to ta:ation therein by rea on o! hi domi$ile, re iden$e, pla$e o! management or any other $riterion o! a imilar nat&re.
The 0ara 1 o! thi Arti$le ha been repla$ed w.e.!. April 1, 2013. 2He ident o! a 6ontra$ting StateI mean any per on who, &nder the law o! that State, i liable to ta therein by rea on o! hi domi$ile, re iden$e, pla$e o! management, (lace o incor(oration, or any other $riterion o! a imilar nat&re, pro%ided, howe%er, that#
a8
Thi term doe not in$l&de any per on who i o&r$e in that State@ and
liable to ta: in that State in re pe$t only o! in$ome !rom
b) In t!e "ase of in"ome #erive# or $ai# b% a $artners!i$& estate& or trust& t!is term a$$lies onl% to
t!e e tent t!at t!e in"ome #erive# b% su"! $artners!i$& estate& or trust is sub'e"t to ta in t!at State as t!e in"ome of a resi#ent& eit!er in its !an#s or in t!e !an#s of its $artners or benefi"iaries. ((ote) T!is #efinition !as been brou*!t in line +it! ,S Treat%. -ifferen"e bet+een .liable to ta / 0s. .sub'e"t to ta /)
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Article =" 9iscal 2omicile%contd>&

Tie/Brea5er Te t #
Jhere an Individual i a re ident o! both "ndia and 49, then !ollowing wo&ld be $on idered e'&entially !or the determination o! the $o&ntry o! re iden$e#
0ermanent home a%ailable to the indi%id&al 6entre o! %ital intere t 6o&ntry o! habit&al abode 6o&ntry o! whi$h he i a national B&t&al Agreement between the $o&ntrie .
0er on other than an "ndi%id&al ) deemed to be a re ident o! the 6o&ntry where the e!!e$ti%e pla$e o! management i it&ated.
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Article ?" 4ermanent *stablishment
Bean a !i:ed pla$e o! b& ine o! an enterpri e thro&gh whi$h it i wholly or partly $arried o&t. 0ermanent e tabli hment in$&de #
a8 to e8 and h8K tandard a per 3A6D Bodel !8 0remi e & ed a a ale o&tlet or !or re$ei%ing or solicitin! orders g8 a wareho& e in relation to a per on pro%iding torage !a$ilitie others: or
i8 an in tallation or tr&$t&re & ed !or the e:ploration or e:ploitation o! nat&ral re o&r$e @ @& 1!ere "!ar*es $a%able for t!e $ro'e"t or su$ervisor% a"tivit% e "ee# 102 of t!e sales $ri"e of t!e ma"!iner% or e3ui$ment an# su"! a"tivities "ontinue for a $erio# not e "ee#in* 4 mont!s 5 %to be read with the 4rotocol%old&&
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4rotocol in relation to sub-(ara!ra(h %@& o Article ? #
For determining whether a b&ilding ite or $on tr&$tion, in tallation or a embly pro;e$t or &per%i ory a$ti%ity in $onne$tion therewith ha $ontin&ed !or a period o! more than 6 month , a $ontra$ting tate hall#
Ta5e no a$$o&nt o! time pent by employee on other ite ha%ing no $onne$tion with the $&rrent ite. Apply more than 6 month te t to ea$h ite whi$h ha no $onne$tion with any other ite, and regard a b&ilding ite a a ingle ite, e%en i! e%eral $ontra$t ha%e been entered into !or wor5 being done, pro%ided it !orm a $oherent whole, both geographi$ally F $ommer$ially
i. ii. iii.
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Service 4* o an Indian *nter(rise in #$
58 the !&rni hing o! er%i$e in$l&ding managerial er%i$e , other than tho e ta:able &nder Arti$le 13 1Hoyaltie and !ee !or te$hni$al er%i$e 8, within #$ by an enterpri e thro&gh employee or other (ersonnel, b&t only i!#
a$ti%itie o! that nat&re $ontin&e within #$ !or a period or period more than ,0 day within any twel%e/month period@ or aggregating
i. ii.
er%i$e are per!ormed within #$ !or an enterpri e within the meaning o! Arti$le 10118 1A o$iated Anterpri e8 and $ontin&e !or a period or period aggregating more than 30 day within any twel%e/month period. ( "ontrast +it! ,S Treat% +!ere one #a% $resen"e tri**ers Servi"e P6 in "ase of relate# enter$rises)
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-8 *xclusions rom 4*Ka&:iliary a$ti%itie Kin line with #' )odel # and preparatory
stora!e o stock o !oods or delivery tri!!ers 4*:
=8
2e(endent A!ency 4* o Indian *nter(rise in #$% in line with Indian Income Tax Act;,0A,& A per on a$ting in #$ !or or o India other than an agent whom paragraph 1+8 applie , o the Indian enter(rise in on behal! o! an enter(rise o! an independent tat& to hall be deemed to be a 4* #$ i!# 1$ontdL8
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a8
he ha , and habit&ally e:er$i e in #$, an a&thority to negotiate and enter into $ontra$t !or or on behal! o! the Indian enter(rise, &nle hi a$ti%itie are limited to p&r$ha e o! good or mer$handi e !or the Indian enter(rise@ or he habit&ally maintain in #$ a to$5 o! good or mer$handi e !rom whi$h he reg&larly delivers !oods or mer$handi e !or or on behal! o! the Indian enter(rise@ or he habit&ally e$&re order in #$; wholly or almo t wholly !or the Indian enter(rise or !or other enterpri e and the enterpri e $ontrolling, $ontrolled by, or &b;e$t to the ame $ommon $ontrol, a the Indian enter(rise8
b8
$8
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Article A" Income rom Immovable 4ro(erty
"n$ome !rom "mmo%able property will be ta:ed in the tate where &$h property i it&ated "mmo%able property hall in$l&de#
0roperty a$$e
ory in immo%able property
Livesto"k an# e3ui$ment use# in a*ri"ulture 4 &!r&$t o! immo%able property
Ship and Air$ra!t ha%e been e:$l&ded !rom the meaning o! immo%able property a there are eparate Arti$le !or the e.
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Article B" Business 4ro its

4ro its o the #$ 4* o an Indian +esident
The pro!it o! an Indian enter(rise hall be ta:able only in "ndia &nle the enterpri e $arrie on b& ine in #$ thro&gh a 0A it&ated in 49. "! the enterpri e $arrie on the b& ine a a!ore aid, the pro!it o! the enterpri e may be ta:ed in 49, b&t only o m&$h o! them a i dire$tly or indire$tly attributable to the 4*.
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S(ecial eatures o Article B
Ta:ation o! 0A in$ome both by "ndia F 49 F $redit method !or elimination o! Do&ble Ta:ation 0A to be treated F ta:ed a entity eparate F di tin$t
=o For$e o! Attra$tion ) >owe%er, 6la& e 1b8 o! old 0roto$ol $lari!ie that ta: a&thoritie not pre$l&ded !rom determining whether 0A too5 a$ti%e part in 3rder pla$ed dire$tly with >3
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Article C " Air trans(ort
0ro!it deri%ed !rom the operation o! air$ra!t in international tra!!i$ by an "ndian enterpri e hall not be ta:ed in 49. 0ro!it to in$l&de intere t deri%ed !rom the in%e tment or depo it o! re$eipt ari ing dire$tly !rom the operation o! air$ra!t in international tra!!i$ b&t hall not in$l&de intere t deri%ed !rom rein%e tment o! &$h intere t
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Article 0 " Shi((in!

"n$ome
o! an "ndian enterpri e !rom the operation o! hip in international tra!!i$ hall be ta:able only in 49. Arti$le doe not apply to in$ome !rom ;o&rney between pla$e whi$h are it&ated in India or #$
Thi
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Article ,/" Associated *nter(rises
Arti$le 10118 permit ad;& tment Jhere#
tran !er
pri$ing
a8 an enterpri e o! "ndia parti$ipate dire$tly or indire$tly in the management, $apital or $ontrol 1B668 o! an enterpri e o! 49, or b8 the ame per on parti$ipate dire$tly or indire$tly in the B66 o! an "ndian and an 49 enterpri e, and $ondition are made between the two enterpri e in their $ommer$ial or !inan$ial relation whi$h di!!er !rom tho e whi$h wo&ld be made between independent enterpri e , then any pro!it whi$h wo&ld ha%e a$$r&ed to one o! the enterpri e , b&t, by rea on o! tho e $ondition , ha%e not a$$r&ed, may be How To +ead A Tax Treaty -o By CA Lakhani ,-./0.1/,in$l&ded in the Sushil pro!it o! that enterpri e and
Article ,/" Associated *nter(rises
Arti$le 10128# Bandate $orre ponding ad;& tment in the other 6o&ntry
Similar
$la& e !or $orre ponding ad;& tment in the other $o&ntry i mi ing in the treatie o! "ndia/ Ba&riti& and "ndia/Singapore.
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Article ,," 2ividends

3ld 4rovision In res(ect o dividend (aid by a #$ Com(any to an Indian resident"
Ta:able 49 49
in "ndia di%idend $rovi#e#
ta: on di%idend to "ndi%id&al re ident o! "ndia limited to 1+M o! gro t!at t!e In#ivi#ual is entitle# to ta "re#it in In#ia.
ta: on di%idend to other "ndian re ident 1other than "ndi%id&al 8 to be e:empt in 49.
In res(ect o dividends (aid by an Indian Com(any to a #$ resident

Ta:able "ndia DDT
in 49 amo&nt
ta: not to e:$eed 1+M o! gro 1in "ndia8 not a!!e$ted
'ew 4rovision we AD 1/,=-,?

Standard 10M 0ara
Arti$le
o! gro di%idend in the o&r$e $o&ntry 11+M in $a e o! di trib&tion o! in$ome7gain !rom immo%able property8 6 ) Anti ) A%oidan$e pro%i ion ) $lari!ied that bene!it not a%ailable i! the 6main (ur(ose5 o! $reation or a ignment o! hare wa to ta5e ad%antage o! thi Arti$le.
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Article ,1" Interest

1. "ntere t ari ing in #$ and paid to resident o India may be taxed in India. >owe%er, &$h intere t may al o be ta:ed in #$ where it ari e and a$$ording to the law o! 49 pro%ided that where the resident o India i the bene!i$ial owner o! the intere t, the ta: o $harged hall not e:$eed 1+M o! the gro amo&nt o! intere t.
2.
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Article ,1" Interest

3.
a8
=otwith tanding the pro%i ion o! para 2#

Jhere the intere t i paid to a ban5 $arrying on a bona!ide ban5ing b& ine whi$h i a resident o India and i the bene!i$ial owner o! the intere t, the ta: $harged in 49 in whi$h the intere t ari e hall not e:$eed 10M o! the gro amo&nt o! intere t. Jhere the intere t i paid to the ?o%ernment o! "ndia or a politi$al &b/di%i ion or a lo$al a&thority o! "ndia or the HB", it hall not be &b;e$t to ta: in #$.
b8
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Article ,- " +oyalties . 9TS

*xam(le #$ resident as reci(ient o income"
Hoyaltie F FTS arisin! in India and paid to resident o #$ may be taxed in #$. >owe%er, &$h Hoyaltie F FTS may al o be ta:ed in India where they ari e and a$$ording to the law o! "ndia b&t i! the bene!i$ial owner o! Hoyaltie 7 FTS i resident o #$; the ta: o $harged hall not e:$eedLL
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Tax +ates or +oyalties E 9TS are as ollows"
For A'&ipment Hoyaltie F Ser%i$e an$illary F &b idiary to en;oyment o! &$h e'&ipment ) ,/F o !ross amounts For Hoyaltie abo%e# F Fee !or Te$hni$al Ser%i$e other than tho e $o%ered
D&ring !ir t !i%e year !or whi$h thi 6on%ention ha e!!e$t#

1+M where the payer i ?o%ernment or it politi$al &b di%i ion 20M where the payer i other than what tated abo%e
D&ring &b e'&ent year ) ,?F o !ross amounts
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De!inition o! 2!ee !or te$hni$al er%i$eE inter/alia in$l&de payment o! any 5ind in $on ideration !or the rendering o! any te$hni$al or $on &ltan$y er%i$e whi$h#
68 6make available5 te$hni$al 5nowledge, e:perien$e, 5ill 5now/how or pro$e e , or $on i t o! the de%elopment and tran !er o! a te$hni$al plan or te$hni$al de ign.
Beaning o! 2ma5e a%ailableE a e:plained in other treatie wo&ld ha%e to applied to the 49 Treaty.
6"T % . De Beer "ndia Bineral 10.8 Ntd. 13(6 "TH (678 19ar.8
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Article ,=" Ca(ital 7ains
Aa$h 6ontra$ting tate may ta: $apital gain a$$ordan$e with the pro%i ion o! it dome ti$ law .
in
"n tead o! pro%iding !or allo$ation o! ta:ing right , the Arti$le ma5e a re!eren$e to Dome ti$ Naw o! re pe$ti%e 6ontra$ting State . Same i the $a e with "ndia/4S ta: treaty 6ompare with other Ta: treatie 6on%ention ) Oa t Di!!eren$e or e%en Bodel
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Article ,?" Inde(endent 4ersonal Service

"n$ome
deri%ed by an individual, whether in hi own $apa$ity or a a member o! a partner hip, who i a re ident o! "ndia in re pe$t o! pro!e ional or other independent a$ti%itie o! a imilar $hara$ter may be ta:ed in "ndia. S&$h in$ome may al o be ta:ed in 49 i! &$h er%i$e are per!ormed in 49 and i! #
a8 he i pre ent in 49 !or a period or period aggregating to ,0 day in the rele%ant !i $al year@ or b8 he, or the partner hip, ha a !i:ed ba e reg&larly a%ailable to him, or it, in 49 !or the p&rpo e o! per!orming hi a$ti%itie
b&t in ea$h $a e only o m&$h o! the in$ome a i attrib&table to tho e er%i$e

"t
ho&ld be noted that the pro%i ion o! thi Arti$le apply only to in$ome deri%ed by an 2indi%id&alE. Jherea in the treaty between "ndia and =etherland , imilar Arti$le applie to a 2re identE.
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How to Calculate 'o8 o 2ays or (artnershi(s" For the p&rpo e o! paragraph 1 o! thi Arti$le an indi%id&al who i a member o! a partner hip hall be re!arded as bein! (resent in the #$ d&ring day on whi$h, altho&gh he i not pre ent, another indi%id&al member o! the partner hip i o pre ent and per!orm pro!e ional er%i$e or other independent a$ti%itie o! a imilar $hara$ter in #$8
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64ro essional services5 include inde(endent# / S$ienti!i$, literary, tea$hing a$ti%itie arti ti$, ed&$ational or
a well a independent a$ti%itie o!# / 0hy i$ian , &rgeon , lawyer , ar$hite$t , denti t and a$$o&ntant
engineer ,
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Article ,A " 2e(endent 4ersonal Services

Indian resident derivin! salary rom #$"
S&b;e$t
to LLL. Salarie , wage and other imilar rem&neration deri%ed by an Indian resident in re pe$t o! an employment hall be ta:able only in India &nle the employment i e:er$i ed in 49. "! the employment i o e:er$i ed, &$h rem&neration a i deri%ed there!rom may be ta:ed in 49.
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Article ,A " 2e(endent 4ersonal Services

Hem&neration
deri%ed by Indian resident in re pe$t o! an em(loyment exercised in #$ hall not be ta:ed in 49 i! #

he i (resent in #$ !or a period not e:$eeding in aggregate
1D3 day d&ring the rele%ant !i $al year@

the rem&neration i paid by, or on behal! o!, an em(loyer
who is not resident o #$, and

the rem&neration i not ded&$tible in $omp&ting the pro!it o!
an enterpri e $hargeable to ta: in 49
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Arti$le 17G/GDire$tor C !ee

Dire$tor
C !ee and imilar payment deri%ed by a re ident o! "ndia in hi $apa$ity a a member o! the board o! dire$tor o! a $ompany whi$h i a re ident o! 49 may be taxed in #$. at (lace where the com(any is resident
Taxability
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Article ,C" Artistes and Athletes

"n$ome
deri%ed by entertainer 1 &$h a tage, motion pi$t&re, radio or tele%i ion arti te and m& i$ian 8 or athlete , !rom their per onal a$ti%itie , whether a$$r&ing to them el%e or to any other per on, may be ta:ed in the o&r$e $o&ntry. ion o! the Arti$le wo&ld not apply i! the entertainer or the athlete i dire$tly or indire$tly &pported, wholly or &b tantially, !rom the p&bli$ !&nd o! the other 6ontra$ting State
0ro%i
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Article ,0" 7overnment +emuneration and 4ensions

Standard
a per 4= and 3A6D Bodel
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Article 1/ " 4ensions E Annuities

Any
pen ion, other than a pen ion re!erred to in Art. 1,128 o! thi 6on%ention, or ann&ity (aid to a resident o India hall be ta:able only in "ndia. 6CAS* 39 23#BL* '3'TAGATI3'5
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Article 1, " Students E trainees

Indian
residents, who are temporarily pre ent in 49 !or p&rpo e o! t&dying, or !or e$&ring ne$e ary training or t&dying or doing re ear$h a a re$ipient o! a grant, allowan$e, or award !rom go%ernmental, religio& , L. organi ation hall not be &b;e$t to ta: in 49 in re pe$t o! !ollowing 1!or a ma:im&m o! + year 8#
?i!t !rom abroad !or the p&rpo e o! hi maintenan$e,
ed&$ation, t&dy, re ear$h or training@

the grant, allowan$e or award@ and in$ome !rom per onal er%i$e to the e:tent o! 7+0 terling
po&nd !or ea$h rele%ant !i $al year

Article 11" Teachers

An
indi%id&al who visits #$ !or a period not e:$eeding two year !or the p&rpo e o! tea$hing or engaging in re ear$h at a &ni%er ity, $ollege or other re$ogni ed ed&$ational in tit&tion in 49, and who was immediately be ore that visit a resident o India, hall be e:empted !rom ta: by 49. CA' B* A CAS* 39 623#BL* '3' TAGATI3'5
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Article 1- " 3ther Income

S&b;e$t
to the pro%i ion o! para 2 o! thi Arti$le, item o! in$ome bene!i$ially owned by an Indian resident, where%er ari ing, other than in$ome paid o&t o! tr& t or the e tate o! de$ea ed per on in the $o&r e o! admini tration, whi$h are not dealt with in the !oregoing Arti$le o! thi 6on%ention, hall be ta:able only in "ndia. tanding the pro%i ion o! para 1 F 2, in$ome o! an "ndian re ident not dealt with in the other Arti$le , and ari ing in 49 may be ta:ed in 49
=otwith
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Article 1=" *limination o 2ouble Taxation

6redit
!or the ta: on the in$ome do&bly ta:ed# Allowed ta: $redit allowed only in 49 and not in "ndia.
4nderlying
1DTAA o! Ba&riti& and Singapore with "ndia pro%ide !or &nderlying ta: $redit in "ndia al o8
Ta:
paring# allowed in o&r$e<<< $o&ntry

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Article 1?" 4artnershi(

Thi
Arti$le ha been deleted w.e.!. April 1, 2013
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Article 1A" 'ondiscrimination

2=ational
E and 2enterpri e E o! other 6o&ntry hall not be &b;e$ted to ta:ation in the o&r$e $o&ntry, whi$h i more b&rden ome than that o! national and enterpri e o! the o&r$e $o&ntry. $rimination o! indi%id&al on the ba i o! re iden$e i permitted.
Di
,-./0.1/,-
Article 1B" )utual A!reement 4rocedure

Standard
6la& e a per 4= Bodel
,-./0.1/,-
Article 1C" *xchan!e o In ormation

Thi
Arti$le ha been amended by the =ew 0roto$ol we! 1 t April,2013 and made more tringent in the !ollowing re pe$t #
The two $o&ntrie $an e:$hange in!ormation whi$h i 2 oreseably relevant 6 a
again t in!o whi$h i 2necessaryE a per the old Arti$le

"! in!ormation i re'&e ted by 6ontra$ting State in a$$ordan$e with thi Arti$le, the
other 6ontra$ting State hall & e it in!ormation gathering mea &re to obtain the re'&e ted in!ormation, e%en tho&gh that other State may not need &$h in!ormation !or it own ta: p&rpo e . The tandard imitation in 0ara 3 hall not be $on tr&ed to permit a 6ontra$ting State to de$line to &pply in!ormation olely be$a& e it ha no dome ti$ intere t in &$h in!ormation.
The tandard limitation in 0ara 3 hall not be $on tr&ed to permit a 6ontra$ting
State to de$line to &pply in!ormation olely be$a& e the in!ormation i held by a ban5, other !inan$ial in tit&tion, nominee or per on a$ting in an agen$y or a !id&$iary $apa$ity or be$a& e it relate to owner hip intere t in a per on.
,-./0.1/,-
Article 1CA" Tax *xamination Abroad

"n
erted by =ew 0roto$ol w.e.!. 1 t April,2013
9or instance in case Indian tax authorities reHuest or examination o a #$ +esident

The
repre entati%e o! "ndia may re'&e t the $ompetent a&thority o! 49 to inter%iew a 49 6iti-en and e:amine re$ord with prior written $on ent o! the per on $on$erned.
,-./0.1/,-
Article 1CB" Assistance in Collection o Taxes

"n
erted by =ew 0roto$ol w.e.!. 1 t April,2013
6ontra$ting 2He%en&e
State hall lend a i tan$e to ea$h other in the $olle$tion o! re%en&e $laim in re pe$t o! ta:e $o%ered by the 6on%ention $laimI mean an amo&nt owed in re pe$t o! ta:e $o%ered by thi 6on%ention a well a intere t, admini trati%e penaltie and $o t o! $olle$tion or $on er%an$y related to &$h amo&nt. o! a $ontra$ting tate owed by a re ident o! the other $ontra$ting tate may, at re'&e t o! &$h $ontra$ting tate, be $olle$ted by the other $ontra$ting tate a $olle$tion o! it own ta:e a i! the re%en&e $laim were a re%en&e $laim o! that other tate. a 6ontra$ting State may, &nder it law, ta5e interim mea &re o! $on er%an$y by !ree-ing o! a et be!ore a re%en&e $laim i rai ed again t a per on, the $ompetent a&thority o! the other 6ontra$ting State, i! re'&e ted by the $ompetent a&thority o! the !ir t mentioned State, hall ta5e mea &re !or !ree-ing the a et o! that per on in that 6ontra$ting State in a$$ordan$e with the pro%i ion o! it law.
6laim
Jhen
,-./0.1/,-
Article 1CC" Limitation o Bene its

Bene!it
o! thi treaty hall not be a%ailable i! t!e main $ur$ose or one of t!e main $ur$oses o! the $reation or e:i ten$e o! &$h a re ident or o! the tran a$tion &nderta5en by him, wa to obtain bene!it &nder thi treaty.
,-./0.1/,-
Article 10 " 2i(lomatic E consular o icials
=othing in thi 6on%ention hall a!!e$t the !i $al pri%ilege o! diplomati$ or $on &lar o!!i$ial &nder the general r&le o! international law or &nder the pro%i ion o! pe$ial agreement . =otwith tanding the pro%i ion o! para 1 o! Art. ( 1Fi $al domi$ile8, an indi%id&al who i a member o! the diplomati$, $on &lar or permanent mi ion o! "ndia it&ated in 49 and who i &b;e$t to ta: in 49 only i! deri%e in$ome !rom o&r$e therein, hall not be deemed to be a re ident o! 49.
,-./0.1/,-
2TAA with 'etherlands
+3
Treaty with =etherland
+elevant 2ates
Signed Date .ear
on ) *&ly 13th, 1,DD
o! $oming into !or$e ) *an&ary 21 t, 1,D, o! $oming into !or$e ) A... 1,,0/ ,1
0roto$ol
igned on Bay 10th , 2012 $oming into !or$e !rom =o%ember 2nd , 2012.
,-./0.1/,-
+(

=etherland
Jage ta:@ 6ompany ta:@ Di%idend ta:@ and 6apital ta:
ta:e $o%ered in$l&de#
"n$ome ta:@
"ndian
ta:e $o%ered in$l&de#
"n$ome ta: S&rta: Jealth ta:

++

'ature o 4*
Conditions
"n tallation & ed !or e:ploration a$ti%itie
Si: Bonth
6on tr&$tion 0A 1S&per%i ion not $o%ered8 0rep. F A&:. A$ti%itie Dep. Agent 0A
Si: Bonth
2deli%eryE not permitted Third $ondition 2 e$&ring order E mi ing =o 0A i! the DA0A paid arm C length $ommi ion
+6
,-./0.1/,-

0roto$ol
$lari!ie that pro!it o! 0A to be determined not w.r.t. !&ll amo&nt b&t only w.r.t. rem&neration attrib&table to 0AC a$ti%ity. $lari!ie that pro!it o! 0A to be determined not w.r.t. !&ll amo&nt b&t only w.r.t. rem&neration attrib&table to 0AC a$ti%ity. 6la& e !or >3 e:pen e / 0roto$ol $ap the re tri$tion 47 . ((6 to that e:i ting on date o! igning the Treaty.
0roto$ol
BF=
,-./0.1/,-
+7
Article C" Air trans(ort

Ta:able
where pla$e o! e!!e$ti%e management i it&ated.
,-./0.1/,-
+D
Article CA" Shi((in!

G0ro!it
!rom the operation o! hip in international tra!!i$ hall be ta:able only in the State in whi$h the pla$e o! e!!e$ti%e management o! the enterpri e i it&ated. t on !&nd $onne$ted with the operation o! hip in international tra!!i$ hall be regarded a pro!it !rom the operation o! &$h hip and the pro%i ion o! Arti$le 11 hall not apply in relation to &$h intere t.
Gintere
,-./0.1/,-
+,
Article ,," Interest

Ta:
in o&r$e $o&ntry limited to 10M
,-./0.1/,-
60
Article ,1" +oyalty and 9ees or technical services

Arti$le
12 o! "ndia/4SA Treaty F B34 to 4S Treaty &b tit&ted !or Arti$le 12 by 0roto$ol. pro%ide !or BF= in re pe$t o! H F D $e .
0roto$ol
,-./0.1/,-
61
Article ,-" Ca(ital 7ains

?ain
!rom the alienation o! hip or air$ra!t operated in international tra!!i$ hall be ta:able only in the State in whi$h the pla$e o! e!!e$ti%e management o! the enterpri e i it&ated. deri%ed by a re ident o! =etherland !rom the alienation o! hare 1other than hare '&oted on an appro%ed to$5 e:$hange8 formin* $art of a substantial interest in the $apital to$5 o! an "ndian $ompany, the %al&e o! whi$h hare i deri%ed prin$ipally !rom immo%able property it&ated in "ndia may be ta:ed in that other State.
G?ain
,-./0.1/,-
62

A
&b tantial intere t e:i t when the re ident own 2+ per $ent or more o! the hare o! the $apital to$5 o! a $ompany. !rom alienation o! hare i ta:able in o&r$e $o&ntry unless reali7e# in "ourse of "or$orate re8or*ani7ation 9 amal*amation et".
?ain
,-./0.1/,-
63
Article ,=" Inde(endent 4ersonal Service

4nli5e The
in the DTAA with 49, thi arti$le i appli$able to all re ident . limit !or the n&mber o! day i.e. 1D3 day i a%ailable to all re ident .
,-./0.1/,-
6(
Article 1-" *limination o 2ouble Taxation

Bethod 4nderlying Ta: 6redit Ta: Sparing
6redit Bethod =o =o
,-./0.1/,-
6+
Article 1A" *xchan!e o In ormation

"n
erted w.e.!. =o%ember 2nd, 2012 to 49 Treaty
Similar
,-./0.1/,-
66
2TAA with Sin!a(ore
67
Treaty with Singapore
+elevant 2ates
.ear o! $oming into !or$e / A... 1,,+/,6

Amending 0roto$ol w.e.!. 1 t A&g& t, 200+

Singapore "ndian
"n$ome ta:
ta:e $o%ered in$l&de "n$ome ta: and any &r$harge thereon
1370,72013
6,

'ature o 4* Conditions
3nly i! & ed !or P 120 day in a !i $al year.

"n tallation !or =at&ral He o&r$e 6on tr&$tion 0A
1D3
day in a !i $al
year
1D3
day in a !i $al
S&per%i ory 0A
1370,72013
year

Ser%i$e 0A !or e:ploration a$ti%itie For other er%i$e P 1D3 day in a !i $al year. P ,0 day in a !i $al year 1P30 day !or related enterpri e8 "n$l&de 23$$a ional Deli%eryE All three alternate te t .
0rep F A&: A$ti%itie
Dep. Agent 0A
1370,72013
Article B" Business 4ro its %Article B&

Art. 7118 r.w. 71D8 2directly or indirectlyE attrib&table to 0A 1 imilar to *apan Treaty 0roto$ol8. Ded&$tion o! e:p. S&b;e$t to dome ti$ law
Art. 7138
1370,72013
Article C" Shi((in! and Air Trans(ort

Ta:able
in $o&ntry o! re iden$e
1370,72013

So&r$e
$o&ntry ) 10M 7 1+M
1370,72013
Article ,1" +oyalties. 9TS

So&r$e State Ta: 2e inition o 6royalty5 Nimited to 10M 10roto$ol8 "n$l&de gain !rom alienation o! right
1370,72013
2e inition o 69TS5
2make
availableE whi$h
2enable LL.. to apply the te$hnologyE
De%elopment F Tran !er o! te$hni$al plan 7 de ign $o%ered only i! it enable appli$ation o! te$hnology. A:$l&de er%i$e lin5ed to ale o! property. in $onne$tion with A:$l&de er%i$e e:ploration a$ti%itie .
1370,72013
From all property other than immo%able property or 0A property or hip 7 air$ra!t Taxable only in the country o residence o alienator How To +ead A Tax Treaty - By CA %4rotocol& Sushil Lakhani
1370,72013
Article ,=" Inde(endent 4ersonal Service

P ,0 day in !i $al year P limited only to ) indi%id&al .
1370,72013
Article ,?" 2e(endant (ersonal service

Ta:able
Q 1+M in o&r$e tate i! the rem&neration ded&$tible in employee C $o&ntry again t FTS deri%ed by employer.
1370,72013
Article 1=" Limitation o +elie

Hed&$ed
rate o! ta: or e:emption only appli$able to that part o! the in$ome whi$h i remitted to the re iden$e tate.
1370,72013
Article 1?" Avoidance o 2ouble Tax

6redit
Bethod
4nderlying
Ta: $redit on inbo&nd in%e tment F o&tbo&nd in%e tment. paring by both countries.
Ta:
1370,72013
Limitation on Bene its %(rotocol&

Treaty
Bene!it not a%ailable
where primary p&rpo e wa treaty hopping.
to hell 7 $ond&$t $ompanie
where ann&al e:pendit&re on operation le than R200,000 or H . +0 la5h in pre$eding 2( month .
1370,72013
2TAA with )auritius
D3
Treaty with Ba&riti&
*ntry into 9orce
Treaty
A.. . 1,D3/D(
1370,72013
Article =" +esident %Article =&

0"B pre
relea e dt. 13.(.2000
16erti!i$ate o! He iden$y to be ta5en a proo! o! He iden$y.8 al o re!er to S6 de$i ion in A-adi Ba$hao1263 "TH 706 1S688
1370,72013

6on tr&$tion F S&per%i ory 0A 0rep F A&:. a$ti%itie Dependent Agent A$ti%ity P , month Deli%ery not permitted - Third $ondition o! e$&ring order ab ent - "n e$ond $ondition 2 ul illE & ed in tead o! 2deliversE
1370,72013

=o
re tri$tion on ded&$tion o! >3 ex(enses
1370,72013
Article C" Shi((in! and Air Trans(ort

Ta:able
where 2(lace o e ective mana!ement situatedE
1370,72013

So&r$e 6o&ntry Ta: A:emption in o&r$e $o&ntry =o limit To intere t paid to go%ernment or Ban5 or i! the loan wa appro%ed by ?o%ernment %re er 2LI)B %11C IT+ 1AC %AA+& E Dobo %#nre(orted&
1370,72013
Article ,1" +oyalties

So&r$e 6o&ntry Ta: FTS Nimited to 1+M =ot $o%ered
1370,72013

From hare
Ta:able only in re ident $o&ntry o! alienator.
1370,72013
Article ,=" Inde(endent 4ersonal Services
=o
time limit pe$i!ied only te t o! 2 ixed baseE pro%ided !or. to all re ident F not re tri$ted to indi%id&al .
A%ailable
1370,72013
Article 11" 3ther Income

Ta:able
only in the resident country
1370,72013
Article 1-" *limination o 2ouble Tax

6redit
method
4nderlying Ta:
Ta: 6redit !or both inbo&nd F o&tbo&nd in%e tment. paring by both $o&ntrie .
1370,72013
2TAA with #A*
,+
Treaty with 4AA
*ntry into 9orce

Nimited Air Tra!!i$ treaty w.e.!. A.. . 1,,1/,2 6omprehen i%e Treaty w.e.!. A.. . 1,,+/,6 0roto$ol Amending w.e.!. A.. . 200,/10
1370,72013
Treaty with 4AA
Article =" +esident %Article =&

6on$ept 4AA "ndi%id&al 1By 0roto$ol8
4AA 6ompany 1By 0roto$ol8 4AA ?o%t. F ?o%t. "n tit&tion Ab& Dhabi "n%t. A&thority
1370,72013
2Niable to ta:E 0hy i$al pre en$e o! 1D3 day in the $alendar year Banaged F $ontrolled wholly in 4AA Deemed to He ident in 4AA Deemed to He ident in 4AA
Treaty with 4AA

6on tr&$tion 0A Ser%i$e 0A 0rep. F A&: A$ti%itie Dependent Agent 0A 2S&per%i ionE in$l&ded "! er%i$e $ontin&e !or , month within any 12 month period 2deli%eryE permitted 3nly one te t o! 2authority to conclude contractsE
1370,72013
Treaty with 4AA

Ded&$tion
o! A:pen e 1Art. 7138 )
S&b;e$t to dome ti$ law 1by 0roto$ol8
1370,72013
Treaty with 4AA
Article C" International Tra ic

Jhere
o!
ta:able ) Ta:able in $o&ntry He iden$e
1370,72013
Treaty with 4AA
Article ,/" 2ividend

So&r$e
6o&ntry Ta: ) Nimited to 10M
1370,72013
Treaty with 4AA

So&r$e
6o&ntry Ta: ) Nimited to +M 7
12.+M
1370,72013
Treaty with 4AA
Article ,1" +oyalties

A:$l&
ion !rom de!. o! 2royaltyE )
royalty or other payment !or operation o! mine or '&arrie or e:ploitation o! petrole&m or nat&ral re o&r$e .
2FTSE not $o%ered impli$ation <
by
the
Treaty
1370,72013
Treaty with 4AA

3n
Share / Ta:able in o&r$e $o&ntry 1By proto$ol8
1370,72013
Treaty with 4AA
Article ,=" Inde(endent 4ersonal Services
=o. o! day o! phy i$al pre en$e Jhether limited to indi%id&al F !irm
1D3 day in the !i $al year =o@ a%ailable to all re ident
1370,72013
Article 1?" *limination o 2ouble Tax

Bethod Ta:
Treaty with 4AA
/ 6redit Bethod Ta: 6redit / =o
Sparing in 4AA / .e
4nderlying
1370,72013
Article 1A" 'on2iscrimination

Ta:ability
Treaty with 4AA
o! 0A at a ) 0ermitted
higher rate
1370,72013
Treaty with 4AA
Limitation o Bene its

By
0roto$ol / =o treaty bene!it i! the main p&rpo e wa to obtain the treaty bene!it ob;e$ti%e te t pe$i!ied li5e in Singapore Treaty or 4SA Treaty
=o
1370,72013
THA'$ D3#
CA Sushil Lakhani

How To A Tax Treaty: by Sushil Lakhani

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How to read A Tax Treaty

'etherland Sin!a(ore )auritius #A*

How To +ead A Tax Treaty - By CA Sushil Lakhani

2TAA with #nited $in!dom %#$&

Treaty with 4nited 5ingdom

on ) *an&ary 2+th, 1,,3

Treaty with 4nited 5ingdom

Article ," Sco(e o the Treaty

Treaty with 4nited 5ingdom

Article , %contd8&" Territorial *xtension o India. #$

How To +ead A Tax Treaty - By CA Sushil Lakhani

Treaty with 4nited 5ingdom

Article 1" Taxes Covered

Treaty with 4nited 5ingdom

Article -" 7eneral 2e initions

Treaty with 4nited 5ingdom

Article -" 7eneral 2e initions

4rior to amendment the de inition read as under"

How To +ead A Tax Treaty - By CA Sushil Lakhani

Treaty with 4nited 5ingdom

Article =" 9iscal domicile%resident&

liable to ta: in that State in re pe$t only o! in$ome !rom

How To +ead A Tax Treaty - By CA Sushil Lakhani

Treaty with 4nited 5ingdom

Article =" 9iscal 2omicile%contd>&

Treaty with 4nited 5ingdom

Article ?" 4ermanent *stablishment

Treaty with 4nited 5ingdom

Article ?" 4ermanent *stablishment

How To +ead A Tax Treaty - By CA Sushil Lakhani

Treaty with 4nited 5ingdom

Article ?" 4ermanent *stablishment

How To +ead A Tax Treaty - By CA Sushil Lakhani

Treaty with 4nited 5ingdom

Article ?" 4ermanent *stablishment

stora!e o stock o !oods or delivery tri!!ers 4*:

How To +ead A Tax Treaty - By CA Sushil Lakhani

Treaty with 4nited 5ingdom

Article ?" 4ermanent *stablishment

How To +ead A Tax Treaty - By CA Sushil Lakhani

Treaty with 4nited 5ingdom

Article A" Income rom Immovable 4ro(erty

ory in immo%able property

Livesto"k an# e3ui$ment use# in a*ri"ulture 4 &!r&$t o! immo%able property

Treaty with 4nited 5ingdom

Article B" Business 4ro its

How To +ead A Tax Treaty - By CA Sushil Lakhani

Treaty with 4nited 5ingdom

Article B" Business 4ro its

How To +ead A Tax Treaty - By CA Sushil Lakhani

Treaty with 4nited 5ingdom

Article C " Air trans(ort

Treaty with 4nited 5ingdom

Article 0 " Shi((in!

Treaty with 4nited 5ingdom

Article ,/" Associated *nter(rises

Arti$le 10118 permit ad;& tment Jhere#

Treaty with 4nited 5ingdom

Article ,/" Associated *nter(rises

Treaty with 4nited 5ingdom

Article ,," 2ividends

in "ndia di%idend $rovi#e#

In res(ect o dividends (aid by an Indian Com(any to a #$ resident